Friday, December 05, 2008
Under Privity of Contract, only parties to the contract may sue on the contract. In Beswick and Beswick, although the widow confers a benefit from the contract, she does not give any consideration to make the contract enforceable. Therefore, she could not sue on the contract. She has to sue on behalf of her husband in order to suceed in the case. However, under Common Law, there are exceptions:
1) Principal sue on the contract entered by the agent. The agent acts on behalf of the principal to enter into the contract, therefore, essentially, the contract is between the principal and third party. However, if the principal do not communicate that he is acting on behalf of the contract or acting out of his authority, the contract is not enforceable by any parties.
2) The rights to sue the contract is transferred to third party. Therefore, the third party may sue on the contract. However it is subjected to all parties' consent.
3) Seller of goods may sue on the letter issued by the bank for buyer of goods. Although the letter is a contract between buyer and bank, seller may sue on the contract.
Rights of Third Party
Third Party can enforce a contract if
1) The contract states that he can eg. he is expressedly identified in the contract as an individual, class of people or based on description.
2) He confers a benefit from the contract.
1) Principal sue on the contract entered by the agent. The agent acts on behalf of the principal to enter into the contract, therefore, essentially, the contract is between the principal and third party. However, if the principal do not communicate that he is acting on behalf of the contract or acting out of his authority, the contract is not enforceable by any parties.
2) The rights to sue the contract is transferred to third party. Therefore, the third party may sue on the contract. However it is subjected to all parties' consent.
3) Seller of goods may sue on the letter issued by the bank for buyer of goods. Although the letter is a contract between buyer and bank, seller may sue on the contract.
Rights of Third Party
Third Party can enforce a contract if
1) The contract states that he can eg. he is expressedly identified in the contract as an individual, class of people or based on description.
2) He confers a benefit from the contract.
Labels: Coporate and Business Law, F4
what we could have been, 9:47 PM.
